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In respect to the disbeliever subjects of the Islamic State being bound by the Ahkaam Ash-Shar’iyah and in terms of its application (or implementation) upon them by the State and compelling them to undertake them, there are a number of details:
1 – If the Ahkaam are stipulated with the condition of Islaam for their performance by a Shar’iy text like the Salaah, Sawm. Hajj, Zakaah and the remainder of the ‘Ibaadaat, then it is not permissible for them to undertake them and they are prevented from that because their Shart (condition) is Islaam (i.e. that they are Muslim).
2 – If the Ahkaam Ash-Shar’iyah do not stipulate Islaam it is permissible for them to undertake them and so for instance it is allowed for them to fight with the Muslims as individuals although they are not forced or pressured to do that. Similarly, their Shahaadah (testimony) is accepted in respect to Amwaal (properties) and in all Fanniyah (crafts) matters.
3 – If the Ahkaam Ash-Shar’iyah do not stipulate Islaam in respect to their performance and there is no Shar’iy text indicating the abandoning of its application upon them, then they are requested to do them, they are applied upon them, are compelled to undertake them and punished for leaving or refraining from them. That is because they are addressed with the Ahkaam Ash-Shar’iyah in a general form and they are not exempted from them due to their Kufr (disbelief). They are covered by the address and this includes the Mu’aamalaat (transactions) and ‘Uqoobaat (punishments). As such, trade (Al-Bai’u) is permissible for them but they are punished for dealing with Ribaa’ (usury) and they are punished by the Ahkaam of Islaam in respect to Saraqah (theft), Zinaa (fornication and adultery), Al-Qisaas (law of retaliation) in addition to the other punishments. The Messenger of Allah (saw) stoned a Jewish man and a woman who had committed Zinaa.
Reference: Al-Waadih Fee Usool ul-Fiqh - Muhammad Hussein Abdullah
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